FIRB Vacancy Fee Compliance for Foreign Property Owners

Understand your annual obligations and avoid costly penalties with fixed fee legal support.

What Is the Foreign Investor Vacancy Fee?

If you own residential property in Australia as a foreign investor, you must lodge an annual vacancy fee return with the Australian Taxation Office. This requirement applies to all foreign persons who received FIRB approval to purchase residential land after 9 May 2017. The vacancy fee was introduced to encourage foreign property owners to make their dwellings available for rent when not personally occupied.

The FIRB annual vacancy fee is generally equivalent to the foreign investment application fee paid at the time of purchase; however, for established dwellings, the fee is now twice the application fee following the 2024 reforms. If your property sits vacant for more than 183 days in a vacancy year, you must pay this fee. Failure to lodge your return or pay the fee can result in significant penalties, including fines and potential forced sale orders. Our FIRB lawyers help foreign property owners across Sydney, Melbourne, Brisbane, and Perth meet their vacancy fee compliance obligations.

Unsure About Your Vacancy Fee Obligations?

Book a consultation with our FIRB lawyers to review your compliance requirements.

How the Vacancy Fee Works

Three key factors determine whether you owe the FIRB annual vacancy fee.

Counting Occupancy Days

Your property must be occupied for at least 183 days during each vacancy year. Occupancy includes you living in the property, a tenant under a lease agreement of at least 30 days, or a family member residing there. We help you track and document occupancy correctly to demonstrate compliance with the Foreign Investment Review Board requirements.

Calculating Your Potential Fee

The vacancy fee matches your original FIRB application fee, or double that amount for established dwellings. For properties purchased at higher values, this can amount to tens of thousands of dollars annually. Our foreign investment property law services include reviewing your purchase records and calculating your potential liability if the property remains vacant.

Exemptions and Special Circumstances

Certain situations may reduce or eliminate your vacancy fee. Properties undergoing substantial renovation, those genuinely listed for rent but remaining untenanted, or dwellings affected by natural disasters may qualify for exemptions. We assess your circumstances and prepare supporting documentation for any exemption claims.

Complete Guide to Foreign Property Owner Obligations

Foreign investment in Australian property comes with ongoing compliance responsibilities that extend well beyond the initial FIRB application. The vacancy fee represents one of the most significant annual obligations, yet many overseas property owners remain unaware of these requirements until they receive an ATO notice or penalty assessment.

Annual Lodgement Requirements

Every foreign owner of residential property must lodge a vacancy fee return within 30 days after the end of each vacancy year. Your vacancy year runs from the settlement date of your property purchase. For example, if you settled on 15 March 2023, your first vacancy year ends on 14 March 2024, and your return is due by 13 April 2024.

The return requires you to declare how many days the property was occupied during the year. You must also provide details about the type of occupancy, whether by yourself, a tenant, or a family member. Accurate record-keeping throughout the year makes this process straightforward.

Penalties for Non-Compliance

The ATO takes vacancy fee compliance seriously. Late lodgement attracts administrative penalties starting at the current indexed penalty unit rate (approximately $330 to $350 as of 2026) and increasing based on the delay period. If you fail to lodge entirely, the ATO may issue a default assessment assuming your property was vacant for the full year. This means you pay the maximum fee plus penalties.

More severe consequences can follow persistent non-compliance. The Foreign Investment Review Board has powers to issue disposal orders, forcing you to sell the property. Criminal penalties may also apply in cases of deliberate non-compliance or false declarations.

Documentation You Should Maintain

Strong records protect you from disputes and support any exemption claims. Keep copies of all tenancy agreements, rental payment receipts, and property management statements. If you occupy the property yourself, retain travel records, utility bills, and any other evidence showing your presence.

For properties undergoing renovation, document the scope of works, building permits, contractor invoices, and progress photographs. The ATO may request this evidence years later during an audit, so store everything securely.

How Our FIRB Lawyers Assist

Our fixed fee FIRB application services extend to ongoing compliance support for foreign property owners. We review your circumstances annually, prepare your vacancy fee returns, and advise on strategies to minimise your fee liability legally. When exemptions apply, we compile the necessary evidence and submit your claim properly.

If you have received an ATO notice or penalty assessment, we can represent you in disputes and negotiate outcomes. Our foreign investor legal advice covers all aspects of residential land acquisition compliance, from initial purchase through to eventual sale.

Received a Vacancy Fee Notice?

Our FIRB lawyers can review your situation and advise on your options.

Why Work With Our FIRB Lawyers

Practical support for foreign property owners across Australia.

Fixed Fee Pricing

Know your FIRB approval cost upfront. No hourly billing surprises for vacancy fee returns or compliance reviews.

Accurate Lodgements

We prepare your annual returns correctly the first time, reducing the risk of ATO queries or penalties.

Exemption Assessment

We identify whether your property qualifies for vacancy fee exemptions and prepare supporting documentation.

Penalty Reduction

If you have missed deadlines or received penalty notices, we negotiate with the ATO on your behalf.

Clear Communication

We explain your obligations in plain English and provide reminders before your annual lodgement deadlines.

Property Law Focus

Part of Sutton Laurence King Lawyers, a boutique firm focused on foreign investment property law matters.

Vacancy Fee Questions Answered

The vacancy fee applies if you received FIRB approval to purchase residential property after 9 May 2017 and the property was vacant for more than 183 days in a vacancy year. It does not apply to commercial property, agricultural land, or properties purchased before this date.

For new dwellings or vacant land, the fee equals the application fee paid. For established dwellings, the fee is twice the application fee. For a property valued between $1 million and $2 million, the base application fee is $28,200 (as of 2024-25), with indexation likely increasing this further by 2026.

A property is occupied if you live there, it is rented to a tenant under a genuine lease for a term of at least 30 days, or a family member resides there. Short-term holiday rentals and Airbnb arrangements of less than 30 days generally do not count toward the 183-day requirement.

Yes, properties undergoing construction or substantial renovation may qualify for an exemption. You must demonstrate that the works genuinely prevented occupation and provide documentation including building permits and contractor records.

Late lodgement attracts penalties starting at the current indexed penalty unit rate (approximately $330–$350). If you fail to lodge, the ATO may issue a default assessment assuming full vacancy. We can help you lodge overdue returns and apply for penalty remission where appropriate.

You must lodge a final vacancy fee return covering the period from your last vacancy year anniversary to the settlement date of the sale. If the property was vacant for more than half of this period, a pro-rata fee applies.

Our FIRB lawyers prepare your annual returns, assess exemption eligibility, maintain compliance records, and represent you in ATO disputes. We provide fixed fee services so you know your costs in advance.

Stay Compliant With Your FIRB Obligations

Fixed fee vacancy fee compliance services for foreign property owners in Australia.